SUC Berhad is considering two mutually exclusive pieces of machinery that perform the same task. The two alternatives available provide the following set of after-tax net cash flows:

	Machine A	Machine B
C0	(RM20,000)	(RM20,000)
C1	RM12,590	RM 6,625
C2	RM12,590	RM 6,625
C3	RM12,590	RM 6,625
C4		RM 6,625
C5		RM 6,625
C6		RM 6,625
C7		RM 6,625
C8		RM 6,625
C9		RM 6,625

Machine A has an expected life of three years, whereas machine B has an expected life of nine years. Assume a required rate of return of 15 percent. You are required to compare the projects by using following methods.

1. Calculate the Payback Period for Machine A and B. (4 marks)

2. Calculate the Net Present Value for Machine A and B. (6 marks)

3. Calculate Internal Rate of Return (IRR) for Machine A and B. (6 marks)

4. Calculate the Equivalent Annual Annuity (EAA) for Machine A and B. (6 marks)

5. Evaluate which project should be selected? Support your recommendation.

(3 marks)